White Paper: Three Texas Basins Could Help Power Data Center Boom

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Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--With its vast energy resources, many data center developers are looking to Texas as a place of significant growth opportunity. A new white paper compares pluses and minuses for the state's three biggest energy producing areas: The Permian Basin, Eagle Ford and Haynesville.

Jason Jennaro is the author of "BARRELS TO MEGAWATTS: Which Texas Basin Will Power The Al Data Center Boom?" He is a co-founder and chief executive officer of FrontierGen (Houston, Texas), "a development platform focused on infrastructure for next-generation industrial campuses." He quotes statistics showing the magnitude of the need: "Data center load is expected to quadruple from 147 TWh (terawatt hours) in 2023 to 606 TWh by 2030-roughly 12% of total U.S. consumption."

Data center developers are facing challenges with both generation and delivery, as sources and grids are already strained in many areas. He said this is pushing more developers to look at the Energy Reliability Council of Texas (ERCOT), "where single-jurisdiction oversight and 'connect-and-manage' rules have enabled -45 GW (gigawatts) of new capacity since 2021."

Together, the three basins produce 40% of the U.S.' natural gas, which is increasingly seen as an intermediate fuel, as development of preferred cleaner fuels at least temporarily lags behind the need.

So Who Wins? Each area has pluses and minuses, but Jennaro said the Eagle Ford is the best option of the three, primarily because it has the most space on its power grid. The minuses are that it may not produce enough natural gas by itself to fuel new generation capacity, needing instead to tap into pipelines from the Permian.

As for spare gas production, the Permian comes out on top, but its power grid is already strained by that very production. Oil producers are increasingly switching from diesel to electricity to power their drilling and production, and ERCOT is straining to keep up with that. Those challenges put the Permian in third on Jennaro's list.

In the middle is Haynesville because it has more gas production than Eagle Ford, but less space on the grid than south Texas, although more than in the Permian.

The Hidden Issue: Patent Litigation Efficiency
Most data center discussions revolve around power and grids, but Jennaro's paper pointed out that data centers rely on "some of the densest portfolios of patented technology in existence." And often there are disputes about whose patent might infringe on another's, and the resulting litigation can tie up progress while it's going through the courts.

What does that have to do with a data center's location? Jennaro explained, "Under 35 U.S.C. § 1400(b), a company may be sued for infringement in any district where it has a 'regular and established place of business.' For a hyperscale data center, that means once the facility is operational, it creates a permanent legal presence, allowing patent holders to bring suits in that district, even if the underlying technology was designed, manufactured or deployed elsewhere."

It comes down to how backlogged the patent courts in each area are. Jennaro said that Texas is divided into four federal judicial districts, all with widely varying levels of backlogs and speed.

For Midland, in Texas's Western District, the news is mixed. On the positive side, Judge David Counts has streamlined the process to speed decision-making. But that has led more plaintiffs filing there. Said Jennaro, "As of Q1 2025, Judge Counts was presiding over approximately 6% of all new U.S. patent cases, making the Midland courtroom one of the busiest for patent matters nationwide."

Beginning in the mid-2000s, the court gained a reputation for handling complex technology disputes through dedicated patent case procedures and active docket management. By 2015, it accounted for more than one-third of all U.S. patent filings.

Haynesville is also an issue. Jennaro said it is located in "the plaintiff magnet of the eastern district" because it also has developed an expedited docket system. Covering Tyler, Marshall and Texarkana, beginning in the mid-2000s, "the court gained a reputation for handling complex technology disputes through dedicated patent case procedures and active docket management. By 2015, it accounted for more than one-third of all U.S. patent filings."

Here again Jennaro's research favors the Eagle Ford, in the Southern District of Texas (SDTX). "SDTX does not operate on an expedited "rocket docket" for patent cases, and the district has historically recorded lower levels of filings from NPEs compared to the Eastern and Western Districts of Texas." He concluded it is the best option on that score.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).